RFAs need to sit up and take note

Mortgage advisers, indeed all RFAs, should be worried, very worried about their future.

Wednesday, June 21st 2017

The Commerce Minister, Jacqui Dean, has announced the make up of the working group which will develop the new Code of Conduct for all financial advisers.

The Code Committee is a bunch of people who write the rules around how advisers need to conduct their business. In a nutshell they are writing your Bible for the future operation of your business.

Assuming the review of the Financial Advisers Act stays largely as outlined by MBIE, then every adviser will have to run their business by the rules laid out by the Code Committee. There are no ifs or buts about it. Just ask any AFA. They have had to operate under the current code every since the FAA came into effect.

Why you should be worried is simple. The new-look committee has no representatives from the advice coal-face. None of those on the committee work on a daily basis as advisers dealing with clients.

What's more there is no specific expertise in the lending or life insurance areas. Sure there are people who work in management roles in the so-called Big End of Town. The little guys, the independent advisers, have no representation on this new committee.

Added to that only one of the eight people currently on the committee made it onto the new committee. As a basic requirement for success you would have thought there was some consistency and knowledge retained.

There are some good people on the new committee, but really the composition of the group should have RFAs worried about their future.

Next week you should get your copy of the latest issue of TMM. If you can't wait till then, check out the digital version here